The Financial Supervisory Commission (FSC) has suspended consideration of IBF Financial Holdings Co’s (國票金控) proposal to fully acquire EnTie Commercial Bank (安泰銀行), as IBF Financial had failed to address four of the commission’s doubts about the deal, Banking Bureau Director-General Sherri Chuang (莊琇媛) said yesterday.
The four doubts regard IBF’s financial strength, its funding resources, the benefits from consolidation and job protection, Chuang said.
IBF Financial can refile its application after it fully addresses these issues, Chuang said.
Photo: CNA
“We noticed that nearly half of the company’s board of directors did not support the merger, and some lawsuits have even been filed amid disputes,” Chuang said. “Under these circumstances, the acquisition of EnTie bank might not be beneficial for IBF Financial’s operation.”
Seven members of IBF Financial’s 13-seat board voted for the acquisition, with six against, she said.
The commission said that IBF Financial should ideally have support from a larger majority of its board members’ and shareholders before reopening the application, she said.
As IBF Financial has invested in the online Rakuten International Commercial Bank Co (樂天國際商銀), and both the online bank and EnTie bank might need capital injection in the future, the FSC questioned whether IBF Financial would have sufficient capital to support both banking units, Chuang said.
IBF Financial plans to acquire EnTie’s shares through a cash-and-share swap. Each EnTie shareholder would receive NT$9.46673 in cash and 0.493344 class A preferred shares, which could be converted to IBF’s common shares after one year for each EnTie share, corporate data showed.
However, the commission is concerned that the swap plan could weaken IBF Financial’s shareholding structure, as the financial service provider did not receive overwhelming support from its board members for the merger, and it might need to seek investors to subscribe to as high as 26 percent of the new shares that are to be issued to fund the merger, Chuang said.
“IBF did not clearly explain who the investors would be. If most of the new shares are to be bought by specific individuals, the buyers could become major shareholders. We would need to review the shareholders’ qualifications,” Chuang said.
IBF Financial said that it would talk with the regulator and make a case for the deal.
EnTie Bank said that its operation would continue unchanged despite the FSC’s rejection of the merger, it said.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
RECORD LOW: Global firms’ increased inventories, tariff disputes not yet impacting Taiwan and new graduates not yet entering the market contributed to the decrease Taiwan’s unemployment rate last month dropped to 3.3 percent, the lowest for the month in 25 years, as strong exports and resilient domestic demand boosted hiring across various sectors, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. After seasonal adjustments, the jobless rate eased to 3.34 percent, the best performance in 24 years, suggesting a stable labor market, although a mild increase is expected with the graduation season from this month through August, the statistics agency said. “Potential shocks from tariff disputes between the US and China have yet to affect Taiwan’s job market,” Census Department Deputy Director Tan Wen-ling
UNCERTAINTIES: The world’s biggest chip packager and tester is closely monitoring the US’ tariff policy before making any capacity adjustments, a company official said ASE Technology Holding Inc (日月光投控), the world’s biggest chip packager and tester, yesterday said it is cautiously evaluating new advanced packaging capacity expansion in the US in response to customers’ requests amid uncertainties about the US’ tariff policy. Compared with its semiconductor peers, ASE has been relatively prudent about building new capacity in the US. However, the company is adjusting its global manufacturing footprint expansion after US President Donald Trump announced “reciprocal” tariffs in April, and new import duties targeting semiconductors and other items that are vital to national security. ASE subsidiary Siliconware Precision Industries Co (SPIL, 矽品精密) is participating in Nvidia